Bitcoin price hits $102 – i guess.

Some Bitcoin sold on BTC-E.com Monday morning for $102. If you look closely. It all happened in 1 minute and was done by one person. . . So if one person somewhere does it, I guess that makes it a headline everywhere. I bought a hat from my buddy for 0.05BTC, they should print the new headline that Bitcoin has soared to the price of 20 hats!

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If you’re new to all this, and not a trader, here is how an exchange works briefly. Buyers and sellers place orders. I place an order to buy 100 oranges for $1 each, you place an order to sell 100 oranges for $2 each. After we’ve placed our orders, we wait and see if someone else fulfills them. So if I or someone else like your offer to sell 100 oranges at $2 each, we can fulfill your order by spending the price you’ve set and buying some of your oranges. Likewise, if you want to unload a whole lot of oranges fast, you can fulfill my order to buy and sell your oranges to me at $1 a piece. Once you’ve filled my order completely, you can then move on and sell to the guy who is only willing to pay 99 cents. The price quoted on the exchange is always the most recent trade that occurred (someone fulfilled someone else’s order). Now if you’ve got enough oranges, you can fulfill everybody’s buy orders all at once – even the guy asking way too little. This is what happened on BTC-E . Of course as soon as this fulfilling of all buy orders happened, people quickly placed new buy orders at reasonable prices and sold them – creating a new most recently traded price that was up where it should be.

So I’m left wondering why someone would do this and I can only think of 2 scenarios. Maybe the seller misunderstood the announcement from Mt Gox and took it to mean the bitcoin protocol was compromised. If you can hack bitcoin, its all worthless, you’d be smart to sell it all. But this is someone with a whole lot of bitcoin, you’d think they’d know what they were doing. Which leads to my second conclusion which is that this was very much an expenditure. No one was trying to save their shirt before a crash, they were creating a headline. If you kept an eye on the buy orders in every exchange and waited for the right time, you could calculate exactly how much you would need to spend to tank the price to $102. I’ve heard it was about 6000 Bitcoins, or 3-4 million dollars.

Is the headline “Bitcoin price hits $102” worth a few million to anyone? Who has that kind of money to spend? Maybe the same organization that has the resources to launch a massive attack on all Bitcoin exchanges this week? Its not hackers, they love bitcoin, soooo. Who does that leave but big government? This would mean all the somewhat positive vibes from the US gov lately are through clenched teeth. Nothing new I guess. They say one thing publicly and do something entirely different.

Also this week, JP Morgan claims bitcoin is “vastly inferior” to gov fiat. hmmmmm

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About remistevens

crazy musician type from toronto, philosophy major. work in a museum. . ..
This entry was posted in Bitcoin Crashing!, Mainstream News and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

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